On April 5, the staff of the California Air Resources Board (CARB) held a workshop to discuss their new cost containment proposal for the Low Carbon Fuel Standard (LCFS).1 The first part of this proposal is to cap the price of all LCFS credit transactions to the same limit set by the Credit Clearance Market (CCM) - e.g. $200 per ton in 2016 dollars. The cap increases each year to account for inflation. The CCM is held by CARB only if entities have outstanding deficits by end of the year, and provided that there are credits pledged to the CCM market.
The second part of the proposal is supplying future credits that CARB staff expects to be generated between 2026 and 2030 by non-metered recharging of electric vehicles, to apply to outstanding deficits not covered by pledged credits. More specifically, CARB is proposing to require California utilities to potentially pledge up to 10 million tons of total credits to the CCM for 2020-2025 compliance.
For more information or LCFS compliance and planning assistance, please contact Alex Marcucci, in Trinity's Sacramento office at (916) 444-6666.